Selective peroxisome proliferator-activated receptor gamma (PPARγ) modulators are expected to be a novel class of drugs improving plasma glucose levels without PPARγ-related adverse effects. As a continuation of our studies for (-)-Cercosporamide derivatives as selective PPARγ modulators, we synthesized substituted naphthalene type compounds and identified the most potent compound 15 (EC(50) = 0.94 nM, E(max) = 38%). Compound 15 selectively activated PPARγ transcription and did not activate PPARα and PPARδ. The potassium salt of compound 15 showed a high solubility and a good oral bioavailability (58%). Oral administration of the potassium salt remarkably improved the plasma glucose levels of female Zucker diabetic fatty rats at 1 mg/kg. Moreover, it did not cause a plasma volume increase or a cardiac enlargement in Wistar-Imamichi rats, even at 100 mg/kg.